NEW DELHI: Apartment rentals in south Mumbai, south Delhi and Gurgaon have fallen by 20-30% in the last one year, according to property consultants.
Property brokers say a slowdown in the job market and commercial office space leasing over the last two years have put rentals in check. Compounding the problem is a rise in supply of apartments and homes in many locations. "Corporates have reduced their rental budgets for their executives, but many landlords still have unrealistic expectations," said Ramesh Nair, chief operating officer, business and national director at property consultancy JLL India. In south Delhi, rentals have dropped by up to 50% in areas like Vasant Vihar, Greater Kailash and Shanti Niketan.
In Vasant Vihar, it is down to Rs 2-2.5 lakh a month from Rs 3-5 lakh a year ago. Similarly, monthly rentals in Shanti Niketan have dropped from Rs 5-6 lakh to Rs 3-3.5 lakh levels in a year.
"Owners are finding it difficult to rent out their apartments or homes unless they are willing to reduce their demand," said Sunil Kapur of Delhi-based KK Real Estate. South Mumbai is facing a similar situation because expats have started to move towards Bandra. "In some parts of south Mumbai, you can get two-year-old rentals today. The supply is very high and demand still slack," said Mumbai-based broker Akhil Kapur of AJ Housing.
According to brokers, rentals in posh buildings in south Mumbai, such as Raheja Atlantis, Imperial heights, Samudra Mahal, Beau-Monde and NCPA, among others, are down by 10% to 30%.
"Many owners are preferring to let existing tenants continue without asking for an increase when the tenure ends," Kapur added. In Gurgaon, where several companies are setting up shop, rentals have fallen significantly. In prime projects on Golf Course Road — Pinnacle, Belaire, Palm Springs, Exotica and others —rentals have slid 30% in the past one year.